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Fisking George Osborne’s ‘hard truths’ speech

6 January 2014

Today, George Osborne used a speech to administer what he called ‘hard truths’ about the economy. But in some cases, the truth was even harder than he let on. Here is a Fisk of his speech…

1. Size matters — ‘Government is going to have to be permanently smaller – and so too is the welfare system.’ 

This phrase — ‘permanently smaller’ — is designed to appeal to Conservatives. But in isolation, it’s pretty meaningless: smaller than what? The Brown peak? The below graph tells the story. The size of the British government (in red) used to be around average for a developed country (in blue). Gordon Brown’s massive achievement was the Europeanisation of the British economy – he bet that the Tories would be too scared to unwind what he did. That the gap between the red and the blue would not close. As things stand, Osborne’s plan is that, by 2015, he’ll be back to where Brown was in 2007, before the crash…

Screen Shot 2014-01-06 at 17.42.35


2. The deficit —‘When I took this job, Britain was borrowing more than £400 million every single day to pay for government spending. But as a result of the painful cuts we’ve made, the deficit is down by a third and we’re borrowing nearly £3,000 less for every one of you and for every family in the country.’ 

To most people (and companies) ‘borrowing’ means debt. Only in SW1 does “borrowing” mean “the increase in debt”. The above quote suggests that people are somehow being made better off. If only. Here’s what’s happening to debt per person:-

Debt per cap

And the Darling plan, which Osborne disparaged as being too slow, had the deficit being cut in half by now.

3. Cuts — ‘We’ve got to make more cuts. £17 billion this coming year. £20 billion next year. And over £25 billion further across the two years after. That’s more than £60 billion in total.’ 

What he doesn’t say is that he will increase spending in other areas, so the real ‘total’ will be just £7 billion. The £25 billion figure led the BBC today but the corporation did not run the figures past those published by the OBR, or put them into the context of total state spending. If they had, we’d see that in real terms, total state spending is going down by 1.1 per cent – or just £7 billion.

Screen Shot 2014-01-07 at 09.27.27

4. A dig at Labour — ‘Some say they’d deal with the deficit, but they shy away from committing to numbers.’

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Cheeky! Is Labour’s failure to ‘commit to numbers’ much worse than Osborne’s strategy so far: committing to deficit numbers, then tearing up his commitment? The below shows how he has fared against the figures he published in June 2010:

Performance against borrowing targets

5. Debt and safety — ‘I want our country’s commitment to economic stability entrenched. Even after we’ve reduced the amount we borrow each year, that still leaves us with a high debt from all the past borrowing. That debt leaves Britain vulnerable – and I want to make us safe.’  

If high debt makes us vulnerable, how does he propose making us ‘safe’? Osborne’s published plans now run to 2018-19, and each year he proposes to increase the national debt. All he’s saying is that, at some point, he’ll stop making things worse. A far cry from a return to the ‘safety’ of Debt/GDP ratios of 40pc.

6. Cutting debts, promise! — ‘So I’m going to ask Parliament to vote too this year on a new charter for budget responsibility that will commit us to reducing those debts.’  

Parliament may take Osborne more seriously if he had proven able to even propose – far less enact – a plan to reduce debt. In real terms: £1.25 trillion now, rising to £1.57 trillion by 2018/19.

7. Earnings — ‘People’s earnings are expected to go up. Inflation has fallen, and that helps.’  

But in the past few years, far higher inflation has been tolerated – as the price of more employment (reduce real wages, and more people are hired but they tend to be paid less). The below graph looks at what’s happening to earnings and it isn’t pretty.

Screen Shot 2014-01-06 at 17.50.41

8. Tax cuts — ‘This April, you’ll see what that means in your wage packet. That’s when we increase the tax-free allowance to £10,000 – and it means in total an extra £60 or so a month for the typical worker.’

Does this oft-quoted figure factor in adjustments in welfare and tax credits? If not, the real sum will be way lower than £60.

9. Petrol — ‘I’m also freezing fuel duty again this year, so your car will cost £11 less to fill up than it would have done.’ 

The majority of the cost of the pump will still be tax, going straight to the Treasury. But petrol prices have fallen, so this is a genuine boast.

10. Jobs — ‘Thanks to this plan, there are now a record number of people in work in our country.’  

This is true, here’s the graph:

Screen Shot 2014-01-06 at 17.55.36

11. Does work pay? ‘And with our new Universal Credit, we’re going to make sure it always pays to work.’  

Not really: Universal Credit will lower the effective tax rate on the low-paid from 95 per cent to a maximum of 65 per cent. Now, will it “pay to work” if you keep £3 in every extra £10 you earn? I’m not so sure – especially if we’re talking hard graft on low pay.



12. Welfare cuts — ‘When you think about the competition this factory faces from around the globe, and the kind of world your children are going to grow up in, wouldn’t it make more sense that your government was spending your money on things like schools and science and a better NHS than more welfare?’ 

I think Osborne is making his gravest mistake here. He sounds mean-spirited, invoking ‘welfare’ as an obvious negative, as opposed to schools and NHS that he casts as obvious positives. But if welfare is high because it’s helping people make the transition from dependency to work, then that’s a price worth paying. But as Matthew d’Ancona’s brilliant book makes clear, Osborne doesn’t see welfare reform that way. ‘It was becoming depressingly clear to Osborne that [Iain Duncan Smith] did not regard welfare cuts as his priority but was engaged (as Osborne saw it) in a quasi-religious programme of mass redemption’. So Osborne seems suspicious about welfare reform was way of saving lives, rather than money. The Chancellor returns to this later in his speech, saying welfare cuts show…

‘how to reduce the deficit without even faster cuts to government departments, or big tax rises on people.’ 

But faster welfare cuts also impact  people. Osborne makes a mistake in talking as if he doesn’t care about this impact. I imagine that such tough messages go down well with focus groups – but it sounds mean-spirited. The Chancellor is not a mean-spirited politician. It’s a mistake for him to impersonate one.

All told, this was a bit of a cheeky speech – Osborne is taking a lap of honour for a race he hasn’t completed. But he has Ed Balls in a difficult position, and he has decided to press home his advantage – wanting to portray Labour as the party of the shirker, and the Tories as the party of the worker. This was an intensely political speech, seeking to draw the dividing line of 2014. As he knows, Balls won’t be able to do the spending much differently – just as he has not been able to do the debt much differently.


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Show comments
  • Tony_E

    I think the most disturbing area of any of the graphs in the piece is the one showing government spending as a percentage of GDP.

    From 1997/8 to the period immediately before the crisis it rose from 34% – about 44%. Before the crisis.

    That’s our big problem. That accounted for a massive jump in welfare spending (tax credits especially, Housing benefit), and increased spending on Health (which has shown very little in terms of productivity gains over the same period).

    It’s not infrastructure spending, most of that was PFI, i.e. Not on that graph.

    So that’s where we start from – a position where the state was bloated beyond all recognition to capture as many voters as possible, so that the fear of removal was at its greatest.

    You cannot win an election promising to cut welfare when the majority of people are recipient in one way or another. That is Brown’s legacy- to raise support for the welfare state by capturing as many people into it as possible.

    • Daniel Maris

      Why is not a big problem for Denmark, Sweden, Netherlands and Germany then?

  • McClane

    Fraser: Good, but you left out the graph showing the cost to savers.

  • Robster

    Interesting comment from Tom Tom “He dare not tell the public to return to 1965 living standards”. A return to 1965 conditions is, in my view, exactly what he should be looking at. There was (as near as) full employment, a manufacturing base and little absolute poverty – and opportunities for young people that do not exist today. There was also a cohesion within society that has gone. A return to the aspirations of half a century ago would be a positive move.

    • Shinsei1967

      Only “full employment” if you exclude women from the workforce.

      And why the fetishisation of manufacturing ? We used to employ 98% of the workforce in agriculture, do you want to return to those days too ? There’s a reason manufacturing provides few jobs, automation and cheap labour globally. Services are higher value jobs – which is why lawyers, IT consultants and media executives earn large salaries.

  • Daniel Maris

    The first graph is probably the most informative.

    Firstly no one wants to be like the USA which has far worse outcomes in terms of health, violence, crime, drug use, prison population, family breakdown and so on than any European country. Its per capita GDP is very misleading due to the huge in equalities and the fact that so much goes on health insurance. Would we really likely to see anywhere in our country scarred as Detroit is? America’s devotion to liberty comes at a price – it’s a bit like an old rock and roller who’s still on the cocaine and groupies.

    Secondly, why is higher EZ government spending a problem? Are we really worse off than Germany, Sweden, Denmark, Austria, the Netherlands,or Belgium?

    The level of government spending is clearly an issue, but I would say the QUALITY of government spending is a much bigger issue.

    • HookesLaw

      re %age govt Spending by GDP —- Yes good point about the USA.
      But – The health spending for the most part in the EU is also by compulsory insurance so is this included in the graph?
      Also whilst there is in fact quite a lot of health spending publicly in the USA quite a lot of it is at State level. So never mind the private spending, is State spending on health included in this ‘govt’ spending?

      There should be definitions included in these graphs so we know. Otherwise they are meaningless.

  • realfish

    Apologies to those who have made a similar point…but it’s worth restating.

    I find it astonishing that in analysis after analysis Fraser repeatedly compares Osborne’s performance with Labour’s theoretical plan. A plan that has the luxury of being frozen at a point in time (early 2010) and never impacted by the contamination of the crises in the Eurozone.

  • Alexsandr

    naughty. the government spending as %age of GDP is a gee whizz graph. You should have made the vertical axis include 0%. You have chopped the bottom off the graph to make the lines look more interesting than reality.
    fraser, get a copy of ‘how to lie with statistics’ by darrell huff.

    • HookesLaw

      Its a typical global warmist trick.

      • the viceroy’s gin

        …which you greenie Camerloons would know all about, for sure.

        • HookesLaw

          What’s your point. I do not believe in man made global warming. Its a scam. Unfortunately the entire scientific establishment is telling the govt a load of baloney. So? Does someone have to believe in absolutely totally every aspect of a party’s policy? A political party is a coalition – unless its UKIP where they have to think what Farage tells them.

          Your very remark – a regular calumny of course – merely betrays your unwillingness to think. Or rather your incapability of thought.
          I am happy to vote conservative because I broadly support the conservative party’s principles and I despise and despair of the Labour party and its socialist principles.
          Geddit? I am happy to be a conservative. Eat your heart out.

          • the viceroy’s gin

            Do you actually think I’m going to read through multiple paragraphs of your socialist numptery, ya’ numpty?

            You’re a typical Camerluvvie hypocrite, taking shots at some global warmingist nutter, even as you Camerluvvies are global warmingist nutters.

            If you weren’t such a zealotous drone, it wouldn’t be worth a mention. But you are and it is.

            • dalai guevara

              tell us, is this your job or your occupation?

              • the viceroy’s gin

                …who’s “us”, the politburo?

          • Terry Field

            So there you have it -‘I do not beleve in’ – so you are a ‘believer’ or ‘disbeliever’ – i.e. someone with a simple medieval mind that knows nothing os any science or productive way of thinking.
            You ‘believe’
            You ‘don’t believe’

  • anyfool

    Why do you keep mentioning the Darling plan, it was a totally meaningless statement of intentions and lies.
    If Brown had been elected, everyman and his dog knew Darling would have been out on his ear before 2010 Autumn Statement.
    No one believes Balls would not have borrowed more, so mentioning Darling is just a smokescreen, as is the media slavering over the deficit, it would have been stupendously higher if that illiterate fool Balls held the reins.
    Fraser your love of charts does not run to what might of been if Balls was Chancellor, but you are quite prepared to put up charts for what Osborne projected.
    Do you not think it is time to start looking at what would of happened and what might if Balls gets back in, after all 18 months is a short time to decide the fate of the country.

  • wiggia
  • Curnonsky

    What this article clearly lays out is Osborne’s calculated mendacity: he claims to be the ruthless master of the budget, slicing and slashing in order to restore financial discipline, when in reality all his boasts are empty comparisons with various impossible trajectories, projections, plans, etc.

    But the beauty of his speech, as he well knows, is that Labour cannot attack his unfounded claims as being founded in fantasy because economic reality is their worst enemy. Lay out the hard evidence of where the economy is and why and they essentially plead guilty to fiscal treason. So all they are left with is the usual leftist bluster and cant which simply reinforces Osborne’s claim to be the high priest of financial integrity.

    And as the economy slowly, painfully grows its way out of recession rising tax receipts will cover up Osborne’s failure to make real, unpopular cuts and thus help burnish the Conservative Party’s electoral chances.

    Vote Tory – for that satisfying illusion of conservatism (but with the rich taste of socialism you love!).

    • telemachus

      Osborne was exposed from the start by Martha and Ed Balls on Wato
      His treasury minister could not identify more than 4% of his boasted cuts while Ed highlighted his irresponsible promised further tax breaks for the rich and targeting of the poor vulnerable and disabled for the pain of cuts
      As we are dragged out of recession by the improving world economy Osborne’s blusterings will look more and more like Hollande without the fairness

    • Shinsei1967

      It would be helpful if Fraser (and his supporters here) outlined the sort of cuts they would suggest that would make a sizeable difference to current government spending.

      If you think there is a relatively easy £20-30bn to cut then why do you think Osborne hasn’t made them ? Do you think he enjoys being criticised for missing his targets ?

      My only suggestion that would reduce government spending by 5% (unless you cut pensions, which would be electoral suicide for the Tories) is cutting public sector salaries (rather than just freezing them). However the shock that would inflict on consumption would probably cause a recession.

      • the viceroy’s gin

        …so do nothing, as that’s the only choice?

        Now you see why the Camerloons are about to get bounced out of government. It’s because they’re listening to that type of nonsense.

        • Shinsei1967

          You rather prove my point with your inability to offer any suggestions for substantial cuts.

          How would you cut £20-30bn from the current £750bn of govt spending ?

          • the viceroy’s gin

            No, you prove my point, with your reassertion that doing nothing is the only choice. That type of reasserted nonsense, again, is the reason the Camerloons are set to get bounced shortly.

            Just to help you along a bit, since there’s a chance you may be able to grasp the absurdity of your position, let’s point out that your assertion is that it’s an impossible task to cut 2.7% of the current budget, a budget that has been continually growing during this time of alleged “austerity”.

            Your contention is that it is impossible.

            • Shinsei1967

              Jeepers, you really are extraordinary.

              So many words and yet you prove my point completely by your inability to suggest how to cut expenditure.

              Seriously, what would you do ? I suggested cutting salaries which is actually an answer, so how dare you say I suggested “do nothing”, I merely added that this would cause a short term recession.

              Otherwise how would you cut ? It’s CLEARLY a difficult question otherwise Osborne would be doing it now.

              Come on, facts and figures, what would you cut ? Broadbrush answer is fine.

              • the viceroy’s gin

                …and you continue to hammer your point, that it’s so impossible to make these miniscule faux “cuts” that your challenge goes unmet. That’s how impossible it is.

                Sorry, lad, but your “reasoning” is exactly the reason the Camerloons are about to get bounced. You characterize the situation, and them, precisely. You’re arguing with me, but your argument is with the voters, unfortunately for you. The Camerloons are about to get bounced, by those voters.

  • 2trueblue

    Debt is complicated, especially when there is a lot of it. We are not alone in the world with our debt and so far it is affordable. Do you think that this would be the case if Brown, Balls, Darling were in the chair.? We all know that Liebore left lots of it and we are living with the result and the fact that it is expensive and that you can not abandon the vulnerable. There was no way of telling how it was going to pan out, and you seem very sure Nelson that Darling/Liebore could have made a better fist of it. Grown up and get a grip.

    • HookesLaw

      Debt is not complicated – it is there demanding its interest payments.
      What is complicated is the spending patterns that created it. And what is even more complicated is the economy which clearly was not generating the tax revenues to pay for that spending. This is a very big problem which may well be very complicated to solve.
      Perhaps this is why Mr Nelson chooses to ignore it.

      I think judging from the headlines at the time the govt and Osborne were amazed at the scale of the tax avoidance going on. I think the other issue may be (and this is without doubt a pure guess) that the nature of our economy is not generating appropriate taxes.
      Browns stealth taxes may well have been an admission of this. Lets not forget now that VAT is an open and up front 20% and assumoing the public are spending then there ought to be some revenue coming in in 2014.

      • Tom Tom

        They could easily set an Minimum Tax level for any company based on revenues after all business rates are independent of profit levels.

        • HJ777

          A tax on company revenues regardless of whether they make a profit? Are you mad? How many companies do you want to put out of business or drive out of the country?

      • 2trueblue

        If it were not complicated the whole world would not be in the position that it is in now.

  • Roy

    Deeper into the mire we sink. Osborne’s “borrowing” is a sacrificial lamb, meant as an endeavour to save his own skin, his Party, and cover-up – always at the expense of the taxpayer – the absurd housekeeping expense account. How can you pretend to be the nations money man, working for the good of the people, when you litter the world with princely benevolence. Starting of course with the monthly bill to the EU black hole. At that price we should walk out immediately. Nothing profound will ever be done since the leadership are stuck firmly in the quicksand of personal survival and a fingers crossed policy of “borrow” and be-damned.

  • HookesLaw

    Osborne has not behaved like a mean spirited man. Yet at every turn you criticise him when he demonstrates this. Its you that need a good fisking Mr Nelson.
    1 – Over 1.2 million fewer public sector jobs to be lost.
    2 – Borrowing is down. Nothing strange. How would you cut the debt in just 3 years Mr Nelson – put up or shut up
    3 – Cut are cuts. Inflation means increased spending. Cuts in bad spending are needed to sustain the economy by investment spending.
    4 – Ever heard of the Eurozone crisis? Ever heard of the fact that the economy shrunk by 7% as part of the depression? You do not want Osborne to be mean spirited and complain when he is not.
    5 – As above – you moan but do not say how the debt can be eliminated as quickly as you want. You ignore the difference between structural and cyclical.
    6 – Where is your plan? Why sneer at a good idea? And jobs? Look at the numbers in work. Jobs have been protected because of wage restraint.
    7 – Disposable incomes have gone up. Jobs have been protected by wage restraint.
    8 – Taxes have been cut. See 7 re disposable incomes.
    9 – even you cannot complain at this one
    10 – Ditto – but it undermines numerous of your other gripes.
    11 – Amazingly you do not want Osborne to cut welfare – this is what is making it difficult for people to get out of bed and into work.

    As ever you are truly pathetic Mr Nelson.

    • Magnolia

      It was mean spirited as well as morally wrong to change the decades old inflation indexation of pensions already in payment to widow survivors and the like as Mr Osborne did during the Emergency budget of June 2010.
      This was retrospective theft of personal wealth in the form of pensions.
      It was also mean spirited as well as a disincentive to work to remove the personal tax allowance for those earning over £100,000.

      • Andy

        A state pension is not ‘personal wealth’.

        • Magnolia

          Public sector pensions are not ‘state’ pensions.
          They may lack a ‘pot’ and be based on a promise/contract but they still represent a store of individual wealth for work done and salary sacrificed.

          • Andy

            Public sector pensions are far too lavish. The contributions made do not in anyway go near to cover the lavish benefits given. Why on earth do you think that so many private sector employers (myself included) have scraped their final salary pension schemes. At least one company I did business with was bankrupted by its pension scheme. The state is no different.

            • Magnolia

              We’re on the slippery slope when ‘we’ unilaterally break pension contracts for those who are very near or already in retirement. There are honest ways to deal with this such as changing the system from this point in time on (while honouring previous commitments so far only) for all public sector workers or for instance drastic cuts in pay for state workers (again with accrued rights protected) in recognition of the generous pension. The result would be a mass exodus of talent out of the NHS to the private sector or abroad but what do you think is coming down the track anyway?
              Better to get it over and done with and with honour.

              • Daniel Maris

                My understanding is that is essentially what has been happening.

                But we need to put this in a context where until recently productivity was rising by may 20%-30% every 20 years. The population did not increase 30% in 20 years.

                We can afford decent pensions.

            • Daniel Maris

              So you admit you walked away from your responsibilties to your staff and expect the state to pick up the bill.

          • Daniel Maris

            It depends. Some parts of the public sector have investment funds, some don’t. In the good times the government used to dip into the pension funds when they were in surplus.

            Pension contributions have been increased substantially by this government and I don’t think there has really been any major resistance from unions to the idea that as people get older, so workers should pay more, as long as employers do as well.

      • HookesLaw

        Persons over £100,000 you say? Really?? Don’t you remember the letter he was left, the ‘there’s no money’ letter?

        I want to see a lot less tax for everybody. And less govt spending. But unlike Mr Nelson I realise it cannot happen in under 3 years when we have inherited a deficit of 160 billion and an economy with 7% of its productive capacity permanently wiped out. Not cyclically but permanently. See the words of the BoE at the time.

        • Magnolia

          Taking away the personal allowance is equivalent to a tax rise and will discourage further working and may even be leading to a loss of tax revenue.

      • HJ777

        That’s ridiculous – it’s not his money, it’s taxpayer’s money.

        The cost of public sector pensions was rocketing and there was no money invested to pay for most of them. Where would you have got the money from?

        • Magnolia

          If the state defaults on public sector pensions in a dishonourable way then it will cease to be able to employ public sector workers unless it is prepared to pay a premium.
          Brain surgeons are public sector workers.

          • HJ777

            Nobody is suggesting that the state defaults on existing accrued rights – it has not done so and if it tried to it would be vulnerable legally. It should, within legal obligations, try to minimise the cost and it should make changes so that the cost to the taxpayer does not continue to increase.

            Public sector workers already are paid a premium over private sector workers, as several independent analyses have confirmed.

            I have no idea what you are trying to say when you point out that brain surgeons are public sector workers. In most countries they aren’t, so why, here, should their pensions be taxpayer subsidised when they aren’t in other countries? Does being a brain surgeon make you any more deserving of a pension (in fact, they are very well paid, so hardly need a subsidy)? Are they more deserving than private sector workers who are paid less but are far more important to our wellbeing, such as sanitation engineers, civil engineers, aerospace engineers, etc.?

            • Magnolia

              Brain surgeons are not more or less deserving than private sector workers but they are likely to have worked in the NHS because there is no effective private medical provision in this country and so their pension will historically be a public sector one because it went with the job. That could be changed for the future but accrued rights should be honoured in full to date.
              It’s not true to say that the state has not defaulted on accrued rights when public sector pensions have historically included an inflation indexation measure of RPI for decades and decades. This was changed by Mr Osborne during the Emergency Budget of June 2010 when he changed it to the lower measure of CPI. It was challenged in the courts and found to be legal but it is still dishonourable and immoral because of the reasons that I have outlined.
              Widow survivors will lose more than their pension recipient husbands.
              The old GP who worked 24/7 on call and his wife who answered the phone and brought up the family while he was out all hours delivering babies and caring for the dying have had part of their pension stolen by this government.
              Good luck with trying to get a competent and dedicated doctor in the future.

              • HJ777

                The change to CPI was found to be perfectly legal – ergo, no default.

                You may not like it, but that is your opinion. It does not make it a default.

                I do not recall you complaining when Gordon Brown taxed pension fund dividends. This affected monies already invested, not just new contributions, and thereby reduced future private sector pensions (most of which are money purchase).

  • Span Ows

    Point 1 is fantastic (and the graph). Point 2. The deficit: the following sentence is superfluous and adds nothing to your point: “The Darling plan , which Osborne disparaged as being too slow, had the deficit being cut in half by now” unless of course you really think – and I’m sure you don’t – that had the Darling plan been followed every thing would suddenly be fine and dandy.

    • HookesLaw

      Darling would have been struck by the same cyclical problems that Osborne was. Mr Nelsons constant repitition of this is truly dispicable.

      • the viceroy’s gin

        Those poor Cameroonian dears, everything and everybody conspires against them, including these cursed “cyclical problems”. I mean, what’s a good little Camerluvvie socialist to do? Hey, maybe if they brought on polygamy, that might help them, you know, just like their previous foray into marriage laws, which turned out so splendidly for them as I’m sure we’d all agree. They just need a little bit more PR and detoxification, and they’re all set. Polygamy might just be the ticket here.

        • dalai guevara

          You know FAQ all about London. Polygamy is everywhere matey, even in the Upper House.

          • the viceroy’s gin

            Yes, you socialist nutters have many interesting practices, no doubt.

            • HookesLaw

              Is this what the grand wizard tells you?

              • the viceroy’s gin

                …just 16 more months, lad, ’til that pink jelloid Cameroon face gets mounted on a spike. Time’s flying, ain’t it?

                • HookesLaw

                  You are looking forward to Miliband? Shout it louder if thats what you want.
                  Or are you looking forward to a 2014 year of growth and rising revenues and falling deficits? The only thing pink – a deep pink – that I see is the colour of the skin on the back of your neck.

                • the viceroy’s gin

                  …just 16 more months, laddie. All the bile and filth you spew isn’t going to change anything. That pink jelly face is going to be staring down at you, blank and stupid. Just like today, come to think of it.

                • HookesLaw

                  Yawn yawn yawn. ‘bile and filth’ — oh how funny and unaware of yourself you are.
                  Grand Wizard gone to bed has he? Night night Mr Pink Neck. Oh – and whilst trying to gain some slumber – do make sure to only count white sheep.

                • the viceroy’s gin

                  …16 more months, lad, and the disgusting and endless detritus of your Camerloon swoon will be ended, with Call Me Dave’s head mounted on a spike.

            • dalai guevara

              We are also reliably informed that there isn’t a London Mayor in living memory who hasn’t been at it.

              • the viceroy’s gin

                Yes, the Londonistan mayors are likely well in line with you socialist nutters, no doubt.

                • dalai guevara

                  you clearly haven’t lived.

                • the viceroy’s gin

                  We’ll need the gibberish translator for this one…

      • Andy

        For once you make a sensible point. We now know that the Brown/Balls recession was deeper and worse than was feared. I am not surprised that this mess is taking so much sorting out.

        • HookesLaw

          Thank you.
          But more to the point is the mendacity of Mr Nelson, who rather like the Red Queen in Alice in Wonderland takes Osborne’s words on borrowng (that it is coming down) and says, ‘that is not what borrowing means it means what I tell you it means’.

          • Daniel Maris

            Er no, Osborne is deliberately confusing people. If he didn’t want to confuse people he could talk about “the amount we have to borrow each year” and “the total amount of debt”.

            • HookesLaw

              ‘the deficit is down by a third and we’re borrowing nearly £3,000 less for every one of you’ seems pretty plain and clear to me.

              • Tom Tom

                at current interest rates which will be maintained so long as the currency is debased and household savings eviscerated. In short we are expropriating households

        • Daniel Maris

          If you build your economy on financial services – a trend started by Thatcher, continued by Major and then further accelerated by Blair and Brown – don’t be surprised if a recession knocks the sh*** out of you.

          • HookesLaw

            I do not see what financial services has to do with that. A recession where workers are laid off is a recession.
            There is nothing wrong with financial services – the issue was that Brown built an economy on a growth in financial services which he thought was permanent – or at least cyclical. It turned out to be structural – ie temporary and has now disappeared. Brown built up his structural spending based on this and it has gone.

            • Tom Tom

              If the FIRE sector parks the assets offshore and the liabilities onshore you have a major problem as a sovereign state which is why the bulk of Britain’s 1000% Debt/GDP ratio is due to The City

            • HJ777

              To be more accurate, Brown built an economy built on credit expansion and increased public sector spending.

              It wasn’t so much built on growth in financial services as sustained by the tax revenue derived from financial services due to the credit expansion he encouraged.

            • Daniel Maris

              Because this type of recession – essentially a financial bubble recession – hits the finance sector hardest. That’s where we saw the biggest failures: investment funds, banks and building societies. Germany was much better protected because, don’t forget, the real world economy has continued to grow at a strong pace…so they had places to send their manufactures to. But our financial bubble was feeding off Chinese productivity.

          • Andy

            It was excess State spending that knocked the ‘sh** out of you’. During the noughties that moron Brown could have used a portion of the revenue to pay off debt, but he didn’t. He chose to expand the state because in his stupid Fascist-Socialist mind a bigger State is a good thing. It isn’t. That was why when recession came, as it always does, we ended up with £160+ billion hole in the accounts.

            • Daniel Maris

              Rubbish – our state spending was nowhere near that of Germany and Denmark – countries which have done better than us over the last 5 years.

    • HJ777

      Precisely. It assumes that Labour would have achieved its deficit reduction ‘plan’ (in fact, merely an aspiration – they never put any spending plan forward). This would have been highly unlikely since it exceeded its predicted deficit for 7 straight years before it left power.

      • the viceroy’s gin

        So, same as the Cameroons then, meaning Darling is the proper comparator for all things Cameroon. QED.

        Which shouldn’t be surprising to us, as LibLabCon are clones.

  • Terry Field

    How clear the graphs are. Even with his latest suggested further cuts the structural deficit only falls to balance at the top of the coming cycle.
    Thjs simple reality is that the size of the state must greatly decline and remain modest for ever.
    All he will achieve is a possible balance with a vast accumulative debt level.
    Balls simply has nothing worth listening to in the face of the cold reality.
    You have to be an economic madman to suggest that the state should be anything other than MUCH smaller in the future. But there are hordes of ‘economists’ who will lie to achieve politically and socially perverted results.

    • dalai guevara

      Sounds convincing at first glance, but then clearly this must in some way relate to the level of government revenue/tax collected, surely.

      When no one pays any tax, no state can be afforded.
      When taxes are paid/ the government generates revenue, then 12 months maternity on near full pay, free University education, statutory free childcare etc etc CAN be afforded – How do countries as diverse as Finland, Austria, Germany, Denmark or Norway do it?

      • dalai guevara

        Apologies, levels of taxes collected are totally irrelevant, revolutionary to think otherwise. Then again, what is ‘British’ about 750,000+ registered companies in the British Virgin Islands?

        You get what you pay for, chaps. You pay nowt, you get nowt in return. Live with it.

    • HookesLaw

      Do you even know what the phrase ‘structural deficit’ means? Which graph shows the structural defict?

      • Terry Field

        I ave forgotten more economics than you are ever likely to know, little runt.
        None of these graphs show that, but I added information for the education of simple folk who do not know.
        And no, it is not the same thing as a balanced budget across the cycle, in case you were about to mask – but if course you were not since you don’t know what that is either!
        Gt a CSE in hard sums have we?

    • HJ777

      How do you know when the ‘top of the coming cycle’ will be?

    • Makroon

      Just a couple of points on Fraser’s latest ‘amateur night at the economy’, or as he would put it, in his pseud way: “fisking”.
      1) Osborne has clearly laid out a decline in government spending as a proportion of GDP, to levels last seen in 1999. There is, of course, an intervening election, but Mr Nelson’s cheap journo trick of being selective with the data and graph axes, should really fool nobody.
      2) No, Nelson, borrowing means ….. borrowing !
      Still, always good journo practice to invent new meanings for words then put words in peoples mouths, eh ? So much for “integrity”.

  • asalord

    Once again Osborne gives definitive reasons for people in Scotland to vote Yes in September.
    Scotland and England are truly two very different countries.

    • HookesLaw

      So where are Scotland going to get the money to pay for their welfare bill?

      • the viceroy’s gin

        …borrow it from the Chicoms, just like you Camerluvvies do .

        • HookesLaw

          So they will borrow then and borrow more.
          As the above article is forced to admit – the govt is lowering the amount it borrows. And is planning (well the tory side of it is) to cut more of what it spends.
          This last fact rather makes yet another nonsense of your usual boringly ignorant and stupid remarks. But at least they highlight your bigotry.

          • the viceroy’s gin

            …the beauty of the jocks separating is, we get a small preview of what your boy Dave’s head looks like on that spike. It’s always nice to see a preview before the show, ain’t it, laddie?

      • Tom Tom

        Foreign Aid from London like Pakistan and China and Argentina do

  • Tom Tom

    Osborne is playing with voters. He cannot control spending. Past spending has resulted in cumulative debt and future spending is driven by interest expense and automatic stabilisers. He dare not tell the public to return to 1965 living standards because today the benefit claimant has access to the same material goods as a working taxpayer and apart from travel costs and work clothes little distinguishes them. They each have votes

    • 2trueblue

      Those who do not work can in fact be better off as you indicate, because they do not have to travel to work, have work clothes and lunch.

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